Taxes in Charleston
South Carolina's Act 110 (H.4216), signed March 30, 2026, replaced the state's prior three-bracket income tax with a real two-bracket structure for tax year 2026: 1.99% on the first $30,000 of taxable income, 5.21% above that -- a genuinely different profile from no-income-tax states (Texas, Tennessee, Florida) and from flat-rate states (Arizona's 2.5%, Colorado's 4.4%) covered elsewhere in this project -- layered with Charleston's 9.00% combined sales tax and no state estate or inheritance tax.
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Learn moreSouth Carolina's New Two-Bracket Income Tax -- Verified Independently, Not Assumed
South Carolina's Act 110 (H.4216) was signed into law by Governor Henry McMaster on March 30, 2026, independently confirmed across PolicyEngine, the SC Statehouse's own bill-tracking page, SCDOR guidance, and the Governor's office signing announcement. Beginning with tax year 2026, it replaces the state's prior three-bracket system with two rates: 1.99% on taxable income up to $30,000, and 5.21% on taxable income above that threshold. This is a real, structural, and meaningfully different tax profile than the no-income-tax states covered elsewhere in this project and a genuinely falling rate, not a flat one -- the bill also sets up a mechanism for further future cuts if the SC Board of Economic Advisors projects sufficiently strong revenue growth (a determination due by February 15 each year, with any single cut capped at a $200 million revenue impact).
Charleston's Combined Sales Tax Rate: 9.00%, With a Disclosed Breakdown Discrepancy
Charleston's combined sales tax rate is 9.00% as of April 2026, per Avalara and multiple sales-tax aggregators. Sources disagreed on the specific component breakdown: one described it as 6.00% state + 0.500% county + 0.500% city (which sums to 7.00%, an apparent inconsistency in that specific source, disclosed rather than silently corrected), while a separate, internally consistent source described it as 6.00% state + 1.00% county local-option tax + 2.00% special-district transportation tax, which does sum to the agreed 9.00% total and is treated here as the more reliable breakdown. South Carolina layers many special taxing districts on top of county rates, and the combined rate can differ even within the same ZIP code -- confirm the specific rate for an exact address before a large purchase.
No State Estate or Inheritance Tax
South Carolina levies no state-level estate tax and no state-level inheritance tax -- confirmed across multiple 2026 estate-planning sources. Only the federal estate tax can apply, and only to estates above the federal exemption threshold (cited at $15 million per person for 2026 following the "One Big Beautiful Bill Act"). This is a real, meaningful advantage for anyone doing estate planning in South Carolina relative to the small number of states that do levy their own estate or inheritance tax.
Social Security and Retirement-Income Deductions: Pointer to Full Detail
South Carolina fully exempts Social Security benefits from state income tax regardless of age or income, and offers a real, current retirement-income deduction structure for filers 65+ ($10,000 retirement-income deduction plus a separate $15,000 general deduction against any income, the two coordinating rather than stacking in full) -- covered in full detail on the retiring topic page in the companion file rather than repeated here.
Groceries and the Real, Falling Overall Tax Picture
This research pass did not independently confirm South Carolina's specific sales-tax treatment of groceries (whether fully exempt, partially exempt, or taxed at a reduced local-only rate) -- this gap is disclosed honestly rather than assumed from other states' patterns covered elsewhere in this project; confirm directly with SCDOR for current guidance. What is confirmed: between the new, falling two-bracket income tax structure, the lack of any estate/inheritance tax, and Charleston County's unusually low property tax rate (see the property-taxes topic page), South Carolina's overall tax profile for Charleston residents is genuinely moderate-to-favorable relative to many other states, even though it is not a no-income-tax state.
Key takeaways
- South Carolina's Act 110 (signed March 30, 2026) replaced the state's prior three-bracket income tax with two rates for tax year 2026: 1.99% up to $30,000 in taxable income, 5.21% above that -- a real, currently-falling structure, independently verified this session, not assumed.
- Charleston's combined sales tax rate is 9.00% (2026), with a disclosed breakdown discrepancy between sources -- the more internally consistent figure is 6.00% state + 1.00% county local-option + 2.00% special-district transportation tax.
- South Carolina levies no state estate or inheritance tax -- only the federal estate tax can apply, and only above the federal exemption threshold.
- Social Security is fully exempt from SC state income tax at any age or income level, with additional real retirement-income deductions for filers 65+ -- see the retiring topic page for the full detail.
- SC's specific sales-tax treatment of groceries wasn't independently confirmed this pass -- disclosed as a gap rather than assumed; confirm directly with SCDOR.
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